ChatterBank5 mins ago
Twitter Shares At $26 Each !
http://
This company has never made a profit, and yet people are expected to pay $26 each for its shares....am I missing something here ?
This company has never made a profit, and yet people are expected to pay $26 each for its shares....am I missing something here ?
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I had to look that up Trigger: http://
But also....
"The business is estimated to have taken $288m in global advertising revenues last year, according to the research firm eMarketer – a figure that is projected to rise to $545m this year and $807m by 2014."
But also....
"The business is estimated to have taken $288m in global advertising revenues last year, according to the research firm eMarketer – a figure that is projected to rise to $545m this year and $807m by 2014."
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//At least the public understands what the company actually does ! //
Can you explain it to me because I am pretty mystified.
Shares are usually bought either for their income or speculation on the share price. As Jake points out the later often ends in tears, especially for those mere mortals who don't have inside knowledge.
Can you explain it to me because I am pretty mystified.
Shares are usually bought either for their income or speculation on the share price. As Jake points out the later often ends in tears, especially for those mere mortals who don't have inside knowledge.
I think they are hoping that they will follow along in the wake of Facebook, whose share price has now surged ahead of its original IPO valuation. The main concern will be whether or not Twitter and its advisers have priced it right for the IPO - a lesson they should have learned from the FB offering.
As to whether or not the company has any intrinsic value - I prefer more conventional business models myself, and have yet to see how Twitter can really be expected to turn a profit, nor have they demonstrated that ability to date.
As to whether or not the company has any intrinsic value - I prefer more conventional business models myself, and have yet to see how Twitter can really be expected to turn a profit, nor have they demonstrated that ability to date.
Agree with you LG. The share is of the kind that you might throw £30k at as a fun bet, when your serious portfolio of established companies is a million or more. It is not a widows and orphans holding.
Ymf, it's easy to see what Twitter does. Everyone knows what it is. And people think they can see what it will be in future, with good revenues . You may not agree with that hope, and neither do I, because the revenues would need to be very high to get near the position where it could pay dividends commensurate with the share price, even allowing for some growth.
Ymf, it's easy to see what Twitter does. Everyone knows what it is. And people think they can see what it will be in future, with good revenues . You may not agree with that hope, and neither do I, because the revenues would need to be very high to get near the position where it could pay dividends commensurate with the share price, even allowing for some growth.
Fred, I tried Twitter and could see no real use above the hype whatsoever, unlike Facebook where, although I consider it the tool of the Devil, I can see a use.
Buying these shares is pure gambling, as you say profits could never reach the right level for dividend, so you are simply gambling on a fad lasting. And we all know what happens to fads
Buying these shares is pure gambling, as you say profits could never reach the right level for dividend, so you are simply gambling on a fad lasting. And we all know what happens to fads
Thanks everybody...things a little clearer now.
But I am still not entirely sure how a company can make a meagre
£16,500 in profits last year but be valued at £11bn. The share prize is only one way of valuing a company. If it only made such a tiny profit of £16,500 in Britain, where is the money going to come from to pay the shareholders the annual dividend ? But its the earnings per share that will be of a concern to big shareholders.
To answer my own question perhaps, it must be the advertising that they are hoping to attract, as it costs nothing to join or use Twitter, But if such huge profits are forecasted to come from these adverts, why doesn't Twitter use adverts to make money now ?
But I am still not entirely sure how a company can make a meagre
£16,500 in profits last year but be valued at £11bn. The share prize is only one way of valuing a company. If it only made such a tiny profit of £16,500 in Britain, where is the money going to come from to pay the shareholders the annual dividend ? But its the earnings per share that will be of a concern to big shareholders.
To answer my own question perhaps, it must be the advertising that they are hoping to attract, as it costs nothing to join or use Twitter, But if such huge profits are forecasted to come from these adverts, why doesn't Twitter use adverts to make money now ?
the fact that everyone knows what Twitter is doesn't mean they know how it's going to make money. Facebook does it with targeted advertising based on the things you've said you do. (Not unlike AB.) I don't know that Twitter will find it equally easy. No doubt it will continue to be popular, at least until the Next Big Thing comes along, but will it make you a profit?
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